Opinion

Taxing Stock Trades Will Hurt Main Street

A transactions tax will end up punishing Main Street, hurting the economy and reducing U.S. Treasury revenues in the next few years. It will thus exacerbate the effects of the financial crisis.

Every few years, the idea of imposing a ""sin tax"" on Wall Street makes a comeback, and the idea is back again in the wake of the financial crisis. Proponents of a securities transactions tax look upon it as a way to punish sinners (securities traders), discourage their sinning (trading), and raise revenue for the U.S. Treasury.

Bills that have been introduced by Sen. Tom Harkin (D., Iowa) and Rep. Peter DeFazio (D., Ore.) would place a tax of up to 0.25% on the value of stock trades—that's 25 cents on every $100—as well as taxing transactions in other financial ...